World stock markets plunge again as Trump doubles down on tariffs

[CharlieH]

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Global stock markets plunged to pandemic-level lows Monday as Trump’s tariff blitz sparked panic selling, with the S&P 500 teetering on bear market territory and Asian indexes suffering historic crashes. The meltdown follows China’s retaliatory 34% tariffs and Trump’s vow to keep his “beautiful” trade penalties in place despite economic chaos—a crisis analysts warn could eclipse 2008’s financial collapse.

 

Market Carnage:

• Asia Collapse: Tokyo’s Nikkei 225 cratered 7.8%, its worst day since 2020. Hong Kong’s Hang Seng nosedived 13.2%—its steepest single-day drop ever—while Shanghai’s index lost 7.3%.

• Europe’s Rout: Germany’s DAX briefly crashed 10% at open before stabilizing at -5.8%, mirroring Paris’ CAC 40 (-5.8%) and London’s FTSE 100 (-4.9%).

• U.S. Pre-Market: S&P 500 futures sank 3.4%, threatening to push the index into bear territory (-20% from peak), with Nasdaq futures down 5.3%.

 

Tariff Domino Effect:
Trump’s 10-50% tariffs on 185 nations—including 34% on China and 20% on the EU—met immediate retaliation. Beijing slapped 34% duties on U.S. goods, restricted rare-earth exports, and blacklisted 11 American firms. “This isn’t a trade war—it’s economic mutually assured destruction,” said Natixis’ Gary Ng.

 

Key Flashpoints:

• Recession Warnings: JPMorgan slashed U.S. GDP forecasts to -0.3% for 2025, predicting 5.3% unemployment as tariffs bite.

• Supply Chain Chaos: Howmet Aerospace declared force majeure on Airbus/Boeing parts, while Amazon faces profit headwinds and Tesla halted Shanghai exports.

• Safe-Haven Rush: Walmart and Costco surged as investors fled to consumer staples; Bitcoin dropped 4% alongside risk assets.

 

Corporate Casualties:

• Tech Wreck: Apple suppliers TSMC and Foxconn halted expansion plans, citing tariff uncertainty.

• Auto Apocalypse: Ford shares hit a 12-year low as EU tariffs threaten $2bn in annual losses.

• Energy Crisis: Chevron warned of $5/barrel oil price spikes if Middle East supply chains fracture.

 

Political Fallout:
Trump doubled down Sunday, calling tariffs “medicine” for a “sick” global trade system. But allies revolted: Israel’s Netanyahu seeks tariff relief in Monday talks, while Taiwan proposed zero-tariff negotiations. The EU is compiling a retaliation list targeting Kentucky bourbon and Florida oranges, and India eyes a bilateral deal to avoid U.S. duties.

 

China’s Gambit:
State media declared tariffs a chance to “turn crisis into opportunity,” vowing to boost domestic tech and rare-earth dominance. Goldman Sachs warns China’s GDP could drop 0.7% this year, but officials plan rate cuts and industry bailouts.

 

Federal Reserve Dilemma:
Jerome Powell faces a nightmare scenario: cutting rates to offset tariff pain risks hyperinflation from import price hikes. “We’re trapped between recession and stagflation,” said former Fed economist David Wilcox.

 

Sector Breakdown:

• Tech: Nasdaq’s 5.3% drop reflects tariff costs on chips and cloud services.

• Energy: Brent crude sank to $63.25/barrel on demand fears, hammering Shell and BP.

• Pharma: Pfizer warned of drug shortages as India restricts U.S. API imports.

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Historical Parallels:
The selloff’s speed—$6 trillion wiped in two days—rivals 2008’s Lehman collapse. But unlike 2020’s COVID crash, this crisis lacks a central bank “bazooka” fix.

 

What’s Next:

• Fed Decision: Emergency rate cut likely by July, despite inflation risks.

• Corporate Exodus: U.S. manufacturers face “nuclear winter” unless Trump pauses tariffs, warns billionaire Bill Ackman.

• Market Reality Check: Citi warns earnings haven’t priced in full tariff impacts: “There’s ample downside left.”

 

Why It Matters:
This isn’t just a market correction—it’s a stress test for globalization. With rare-earth supply chains fracturing and SMEs facing bankruptcy, the world faces a choice: capitulate to Trump’s demands or risk a 1930s-style trade collapse.

 

Based on a story by AP 

 

08.04.2025

[henryford1958]

These so called "plunges" just bring the markets back to where they were a year or so ago.

[JimHuaHin]

Seems that Trump has just started World War III - it may not be a military war (yet!), but it is certainly an economic war.  The USA, Israel and Russia against the rest.

[Digitalbanana]

27 minutes ago, henryford1958 said:

These so called "plunges" just bring the markets back to where they were a year or so ago.

With inflation, population growth and manufacturing and services growth - thats a good thing is it?

[Hamus Yaigh]

30 minutes ago, henryford1958 said:

These so called "plunges" just bring the markets back to where they were a year or so ago.

Read up about corrections, bear markets and recessions, then report back.

[Yagoda]

T Bills down to 4.17.

 

Steady drop. Winning.

[henryford1958]

8 minutes ago, Digitalbanana said:

With inflation, population growth and manufacturing and services growth - thats a good thing is it?

 

So they FTSE100 has only gone up 30% in the last 5 years instead of 35%, what a disaster!

[JonnyF]

The man is not for turning.

 

Everyone knows that investments may go down as well as up. That's why a long term approach is always the correct one. 

 

 

 

 

[Digitalbanana]

The long term approach should not include sending a country like the USA into recession because of tariff induced inflation, companies losing money and laying people off when only 4 months ago it was thriving with free trade and markets at all time highs and inflation albeit still high under control and falling. 

[Hamus Yaigh]

A "just trust" one man approach, with a support cast of executive office members all running the same insulting sound bites of adoring nonsensical rhetoric, for running the largest economy on the planet is not a sound economy? Congress needs to grow a pair and sort the sh** out soon.

[KhunLA]

Fear selling ... perfect scenario for 'market makers', and good time to invest when they bottom out, as will recover almost as fast.

 

I wouldn't be surprised if 'they' caused the fear selling.  And Trump gets the blame.   Yes, that is the scam of the markets ... IMHO, and from years of experience and watching them do, just that.

[Purdey]

Don't worry - when the depression starts. Trump will tell everyone

It was all caused by Biden and Obama.